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EUROPEAN MIDDAY BRIEFING : Stocks Skid After Fed -2-

08/19/2021 | 06:00am EDT

Copper hit a four-month low on the LME, extending Wednesday's retreat and dragging prices down more than 7% so far this week. The likelihood of Fed tapering and concerns about demand, driven by the Delta variant, were weighing on metals.

LME copper stocks are at their highest level in more than a year while China's economy is showing signs of slowing. "The specter of tapering asset purchase by the Fed saw risky asset classes come under pressure. This wasn't helped by some weaker than expected economic data and gains in inventories," said ANZ.

Gold prices wavered, failing to gain support from a broad, risk-off move across markets.

"The gold rally has stalled--not reversed--but it may face a more uphill struggle going forward," said James Steel, chief precious metals-analyst at HSBC. "The biggest positive in gold's corner may be that the market has likely accounted for coming asset purchase reductions. While this does not argue that gold will go higher, it supports the notion that gold may not go much lower."


Goldman Sachs to Acquire European Asset Manager for $1.9 Billion

Goldman Sachs Group Inc. said Thursday it agreed to acquire the money-management operation of Dutch insurer NN Group NV for about $1.87 billion, as the need for scale in the asset-management business to lower costs drives sector consolidation.

The New York-based investment bank said it plans to merge NN Investment Partners with its Goldman Sachs Asset Management arm to gain access to a bigger pool of retail and institutional investors in Europe and bolster its product offerings in areas such as European equities, investment-grade credit and green bonds.

Norway's Central Bank Expects to Raise Policy Rate in September

Norway's central bank kept its key interest rate at zero at Thursday's monetary policy meeting, as expected, and reiterated that a rate hike is likely in September.

Norges Bank said the reopening of society after coronavirus-related restrictions has driven a marked rise in activity, and unemployment has fallen further. At the same time, there is still uncertainty as to the evolution of the pandemic and the impact on the Norwegian economy.

UK Government Intervenes in Ultra Electronics Takeover by Advent's Cobham

The U.K. government said late Wednesday that it is intervening in Ultra Electronics Holdings PLC's proposed 2.57 billion pounds ($3.53 billion) takeover by Advent International Corp.'s Cobham Group Holdings Ltd. on national security grounds.

The U.K. government said Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng issued a public interest intervention notice to intervene in the deal.

Antofagasta 1H Profit, Revenue Rose

Antofagasta PLC said Thursday that profit for the first half rose as revenue increased, and that it was lowering its copper production for the year.

The FTSE 100 Chile-based copper mining company said copper production is expected to be in the 710,000 to 740,000 metric tons range compared with previous guidance of 730,000 to 760,000 tons. The bottom end of the range is based on the assumption there is minimal precipitation for the rest of the year, it said.

Geberit 1H Sales, Profit Leapt; Sees 2021 Revenue Growth

Geberit AG said Thursday that net profit and sales rose sharply for the first half of the year, and that it expects good sales growth in the full year.

The Swiss sanitary-goods maker made a net profit of 460 million Swiss francs ($501.6 million) in the six months to the end of June, almost 50% higher than the CHF315 million it booked for the same period last year.

Gold Fields 1H Earnings Doubled; Backs 2021 Production Guidance

Gold Fields Ltd. on Thursday reported doubled earnings on most of its key metrics for the first half of the year, as previously flagged, and backed its full-year production guidance.

The South African mining company made a net profit for the half year ended June 30 of $387.4 million, compared with $155.5 million a year earlier.

Taliban Is Denied Aid Tagged for Afghanistan, but Taps Billion-Dollar Drug Trade

The Biden administration is set to cut off the Taliban's access to billions of dollars in critical overseas finance, but some officials warn that the terror-group's income from drug sales and other illicit activities threatens to undermine Washington's last-resort pressure campaign.

The U.S. has largely secured the backing it needs to block the Taliban's access to billions in reserves held at the International Monetary Fund and assistance pledged through the World Bank and other donor groups, according to people familiar with the matter.

Pfizer's Covid-19 Booster Shot Improves Immunity, Israeli Study Suggests

TEL AVIV-Early data from Israel suggests a booster shot of Pfizer Inc.'s Covid-19 vaccine can significantly improve immunity in those aged 60 and above, as the U.S. and other countries plan additional doses to increase protection against the highly infectious Delta variant.

Israel was one of the first countries late last month to authorize a third Pfizer dose for the elderly who were fully vaccinated with the recommended two shots, after indications that vaccine protection against severe illness has waned.

Israeli Prime Minister Bennett to Visit White House

Israeli Prime Minister Naftali Bennett will meet with President Biden at the White House on Aug. 26, White House press secretary Jen Psaki said. The two leaders will discuss Iran, among other issues, Ms. Psaki said.

"The visit will also be an opportunity for the two leaders to discuss efforts to advance peace, security and prosperity for Israelis and Palestinians and the importance of working towards a more peaceful and secure future for the region," Ms. Psaki said.


Bond Market Signals Confidence in Fed Policy Outlook

A key bond-market signal suggests investors feel they have a firm grip on Federal Reserve policy, reducing the chances that the central bank's Jackson Hole conference next week will break yields from their recent pattern.

For nearly two months, the extra yield investors demand to hold the 30-year U.S. Treasury bond over the five-year note has been mostly hovering just below 1.2 percentage points. The closely watched differential-known on Wall Street as the 5-30 spread-dropped sharply from about 1.4 percentage points after the Fed's June 15-16 policy meeting.

Jobless Claims Likely to Fall as Labor Market Withstands Delta Variant

Applications for unemployment benefits are likely to reach a new pandemic low, showing a healing labor market even as the Covid-19 Delta variant continues to cause uncertainty.

Economists surveyed by The Wall Street Journal estimate that initial jobless claims, a proxy for layoffs, will decline by 10,000 to a seasonally adjusted 365,000 for the week ended Aug. 14. That would be the lowest level since the pandemic took hold in the U.S. in March 2020. The Labor Department will release the latest numbers at 8:30 a.m. ET Thursday.

Chinese Bad-Debt Manager Huarong to Be Bailed Out by State-Owned Firms

China's top manager of distressed assets said it would post a massive loss and expects to receive a capital infusion from state-owned financial institutions, avoiding a messy default that would have had wide repercussions for Asia's credit markets.

China Huarong Asset Management Co., which is majority owned by China's Ministry of Finance and the largest of the country's managers of nonperforming loans and other bad debt, also said it has no plans to restructure its debt, cementing beliefs among investors that many Chinese institutions are too big to fail.

Fed Signals Asset Purchases Likely to Slow This Year

Federal Reserve officials last month indicated they were on track to begin reversing their easy-money policies later this year, despite lingering differences over when exactly to pull back support for an economy growing faster than they expected earlier in the year.

Minutes of their July 27-28 Fed meeting, released Wednesday, revealed an emerging consensus to begin scaling back the bank's $120 billion in monthly purchases of Treasury and mortgage securities at any of the officials' three remaining policy meetings this year.

Write to paul.larkins@dowjones.com

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

08-19-21 0559ET

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